connect it to another USB or better yet to another computer n restore there. I had this problem once when I installed Rock after Cydia n ran some apps. got stuck n rebooted n returned to ur case! BTW Win7 seems a little buggy with iPod with damaged firmware. If u another system try it!

If ur ipod gets detected on computer do this to get into DFU easily...
1. Turn on the volume of ur PC as high as u need.
2. hold POWER+HOME button until iPod turns off, a sound of USB device disconnected will be heard.
3. After the sound release the POWER button but keep on holding the HOME button until iTunes popup with a recovery message. (this will take about 30 seconds). At this moment ur iPod screen should be blank!

Don't worry, when iPod doesn't boot well it may show all kinds of problems. No need to panic there!

ok everything worked i am about to jailbreak butone note: the one thing is that when i was in step 3. my ipod screen did not go blank it still had that connect to itunes image but it worked THANK YOU SO MUCH!!!!!!